By Monika Ermert for Intellectual Property Watch
The European Parliament this week passed a resolution on cross-border collective rights management asking for a framework directive at the EU level that would encourage more competition. But parliamentary members of the bigger political party groups warned against a “big bang” of unrestricted competition and an overly rapid harmonisation of collective rights regimes.

The resolution calling for a framework by Parliament, the European Council of member state representatives and the European Commission welcomed more competition and more transparency in the traditional-style system to remunerate authors and musicians as promoted by the Commission earlier though a non-binding recommendation. But some Parliament members warned the competition could result in a decline in remuneration for authors and composers and, as a consequence, a decline in cultural diversity in Europe. In addition, the Parliament warned that the Commission, in addressing the sensitive issue on its own, bypassed wider consultation.

“Collecting societies are a necessary evil, and certainly Parliament has had its problems with them,” said Klaus-Heiner Lehne, member of the Conservative party (EPP-ED). So far there are 27 national monopolies of collecting societies and no common market in Europe, he said. “It’s therefore completely correct that Commission started to look for solutions. But we also do not want to exchange 27 monopolies with a few oligopolies.”

The Commission published its “recommendation on collective cross-border management of copyright and related rights for legitimate online music services” (2005/737/EC) in October 2005 focussing on adjustments to the digital music market. “The absence of EU-wide copyright licenses has been one factor that has made it difficult for new Internet-based music services to develop their full potential,” wrote the Commission. Creators should be able to choose collecting societies that offer EU-wide licenses for use of the creators’ works online, the recommendation stated, adding that collecting societies should not be obliged to go through intermediaries – their partner collecting societies – for the extraterritorial rights management.

But the traditional system of reciprocal agreements between the various national collecting societies should not be given up completely, the Parliament said. It had, according to the report of Katalin Lévai, rapporteur for the Parliament’s Legal Committee, provided users with a one-stop-shop for worldwide repertoires. That system had ensured that not only big rightsholders, but also small ones and local authors, were well represented in the market. Lévai said during the debate Monday night in Parliament: “We want a good balance between the diverging interests, between competition and culture, big and small rightsholders, and also between big rightsholders and the single author.”

Parliament warned that unrestricted competition might lead to concentration with big rights holders handing over the licensing of their repertoire to big collecting societies. Two big mega-alliances have already started shopping for big rightsholders’ repertoire: Celas, jointly owned by the German GEMA and the British MCPS-PRS, and the alliance of French Collecting Society Sacem and the Spanish Collecting Society SGAE. Celas was set up, according to the new alliance’s information, “to exclusively represent EMI Music Publishing’s repertoire for online and mobile exploitation in Europe.

GEMA spokesperson Hans-Herwig Geyer during the recent Midem music industry conference told Intellectual Property Watch that the biggest challenge was to not create competition on the price because this would mean less money for creators. Competition at creators’ expense certainly would not be what the Commission had wanted, said Lévai in her report. The Committee on Culture and Education also warned that the elimination of some small collecting societies might result in a concentration of cultural production as well. Spanish Socialist Manuel Medina Ortega warned against a harmonised market where big rightsholders could even influence what kind of cultural products should be produced.

Commissioner Vladimir Spidla reacted to the Parliament’s debate by warning against a framework directive that would be binding for member states. “The online music market is only emerging,” he said, and Parliament should not unduly restrict market development. Spidla also rejected the notion that there is a downward spiral in royalties.

How the Commission would react to Parliament’s demand for a directive that only can be passed through a much more consultative joint decision procedure remains to be seen. Commission officials so far have not commented on possible consequences. The Parliament’s resolution is not binding, say members of the Parliament. The Commission is conducting a public consultation on changes of the cross-border collective rights management system and might wait for results from this, said Cornelia Kutterer, Senior Legal Advisor of BEUC, the alliance of EU Consumer Protection Organisations. A second recommendation by the Commission on digital rights management and levies expected in December has not been published.

Behaviour of Commission, Lobbying Campaign Criticised

Parliament members were not pleased with not having been consulted on the sensitive and complex issue. A recommendation may be published by the Commission unilaterally without influence from Parliament and Council. “It’s a shame,” said British Liberal Party Member Diana Wallis (ALDE), the Parliament had to force its way into the procedure through initiating its report.

“The recommendation was not the correct legal instrument,” said Hans-Peter Mayer (EPP-ED, Germany). “I am not happy with the soft law approach chosen by the Commission that did not involve Member States and Parliament,” Lévai said in her report, arguing that the EU’s legislative triangle had to be upheld.

Critical comments also addressed the lobbying strategies of some collecting societies. Green Party Member Eva Lichtenberger warned her colleagues during the debate that a petition entitled “writers and composers for choice” sent to members of Parliament was not authorised by everyone represented as a signatory. Lichtenberger pointed to a press release by the European Council of Artists which states: “The ECA is well aware that there is an ICMP/CIEM International Confederation of Music Publishers (Confédération Internationale des Editeurs de Musique) petition ‘writers and composers for choice’ circulating with a number of artists mentioned, some of whom have assured us that they had never been asked to sign in.”

While the ECA together with the other artists associations concerned said they would take steps to clear up the matter, it said, “we reject the misleading and at times ridiculous contents of this petition claiming rightly that there ‘will be pressure to vary the recommendation from those who do not share our desire to encourage and support our culture.’ Whoever speaks of our culture has not even understood that culture, like snow, does not go together with possessive pronouns.”

After the Parliament’s decision spoke about dubious lobbying methods, Lichtenberger in a press release welcomed that, despite these methods, Parliament had clearly voted against unrestricted competition.

Monika Ermert may be reached at info@ip-watch.ch.